According to the quarterly survey of 3,000 firms in early January, 25% of those surveyed saw new orders rising in the first quarter, up dramatically from 10% in the fourth quarter. Those expecting a decline in new orders were unchanged at 23%.
"This was the largest quarter-to-quarter increase in balance since a 35-point jump in the April 2002 survey," Statscan said.
Despite improved readings on production levels, unfilled orders and employment, the balance of opinion remained negative as firms struggle with a strong Canadian dollar, rising foreign competition and lack of skilled labor.
Eighteen percent of the manufacturers surveyed expected production to increase in the first quarter from 16% in the previous quarter. However, 23 percent expected a decline and 49% saw no change in output.
Statscan said manufacturers' woes in Ontario and Quebec offset optimism in other regions.
The most pessimistic note in the survey related to firms' concerns about inventories. Some 20% felt inventories were too high, up from 14% in the fourth quarter.
The Bank of Canada said in its monetary policy report this month that Canadian auto firms had largely adjusted their inventories in reaction to a slowdown in the US market. (Reuters)
